Here's What Drove Under Armour, Inc.'s Latest Beat and Raise

Under Armour stock

Source: Under Armour.

Another quarter, another beat and raise from Under Armour  (NYSE: UA  ) . Only this time, the market actually rewarded patient shareholders with a 15% pop.

To be sure, exactly three months ago Under Armour stock fell 9% after the company crushed expectations, but only slightly raised full-year guidance as management outlined several reasons behind their relatively conservative forecast for each of the next three quarters.

And conservative it was. On Thursday, Under Armour announced that second-quarter revenue grew an impressive 34% year over year to $610 million -- which, by the way, marks its 17th consecutive quarter of achieving at least 20% top-line growth. Gross margin rose to 49.2% from 48.3% over the same period, which translated to flat net income of $18 million, or $0.08 per share. For that, investors can mostly thank a planned shift in timing of marketing and "product innovation" expenses.

Even so, analysts were only looking for earnings of $0.07 per share, and on significantly lower sales of $574.4 million.

So what helped Under Armour accelerate its incredible top-line growth? Apparel revenue, for one thing, increased 35% over same year-ago period to $420 million. Footwear sales also grew 34% to $110 million, while accessories revenue jumped 18% to $60 million. Meanwhile, Under Armour's higher-margin Direct-to-Consumer revenue jumped 38% over the same period, and now represents 31% of overall sales.

But perhaps most impressive was Under Armour's progress abroad. International revenue grew a whopping 80% year over year, and still only represents 8% of total sales. Under Armour's founding CEO Kevin Plank elaborated, "In International, we are executing in all regions and are proud of key second quarter milestones such as our initial product launch in Brasil and partnering with key distributors to open the first Brand House stores in Panama, the Philippines, and Singapore."

Under Armour stock, Notre Dame

Under Armour is looking forward to its first season outfitting the University of Notre Dame.
Photo source: Under Armour

If that wasn't enough, Under Armour's also looking forward to kicking off several upcoming athletic seasons, through which it'll enjoy the start of new relationships including the U.S. Naval Academy, the Cruz Azul Futbol Club in Mexico and, perhaps most notably, the start of a watershed 10-year agreement it announced earlier this year to support the University of Notre Dame.

As a result, Under Armour now anticipates 2014 revenue to be in the range of $2.98 billion-$3.0 billion, or an increase of 28%-29% over last year, with operating income of $343 million-$345 million. For perspective, when it raised guidance last quarter, it told investors to expect 2014 revenue of $2.88 billion-$2.91 billion, with operating income of $331 million-$334 million.

Where does that leave investors today? Even considering its incredible growth, Under Armour stock certainly isn't "cheap," trading around 91 and 60 times trailing-12-month and forward earnings, respectively. Then again, Under Armour stock seldom does seem inexpensive given its extended habit of overdelivering on Wall Street's expectations. Still, while I have no immediate plans to add to my own personal position following Thursday's jump as I did after last quarter's pullback, I certainly won't be selling any of my shares today.

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